Chordiant Software (Nasdaq: CHRD), the leading provider of Customer Experience (Cx) software and services, today announced its financial results for the third quarter of fiscal year 2008 ended June 30, 2008, and filed its Quarterly Report on Form 10-Q with the Securities and Exchange Commission.
Third Quarter Fiscal Year 2008 Financial Highlights
- Total revenues of $30.7 million, up 24% from prior quarter;
- License revenues of $11.0 million, up 128% sequentially;
- Non-GAAP earnings per fully diluted share of $0.08, with Generally Accepted Accounting Principles ("GAAP") earnings per fully diluted share of $0.02;
- Bookings of $26.4 million, up 30% sequentially;
- Ending backlog of $89.6 million; and
- Generated cash flows from operations of $4.6 million.
- Signed two new transactions greater than $1 million;
- Received an order greater than $1 million associated with an existing customer commitment;
- Received significant add-on license transactions at Citi totaling just under $1 million;
- Went live with Vodafone in their initial implementation;
- Named as the winner of IBM's 2008 IMPACT Business Process Management Award;
- Expanded product offering with two new product releases; Recommendation Advisor 6.1 and Collections Manager 2.0; and
- Chairman, President and CEO, Steven R. Springsteel captures Ernst & Young Entrepreneur of the Year 2008 Northern California Award.
"The business environment continued to be challenging in the third quarter," stated Steven R. Springsteel, Chairman, President and Chief Executive Officer. "However, I am pleased with how our organization executed despite the weak macroeconomic backdrop. We continue to see strong activity in emerging markets and within our installed base, and believe that the investments we have made are on track to pay future dividends."
Third Quarter Fiscal Year 2008 Financial Results
Total revenues for the third quarter of fiscal year 2008 were $30.7 million, up 24% sequentially from the $24.7 million recorded in the quarter ended March 31, 2008, but down 16% from the $36.8 million reported for the third quarter of fiscal year 2007 ended June 30, 2007. The third quarter of fiscal year 2007 included the recognition of $8.0 million in license revenues that had previously been deferred until a new product offering was released.
License revenues for the third quarter of fiscal year 2008 were $11.0 million, up significantly from the $4.8 million reported in the prior quarter, but down compared to the $14.1 million reported for the third quarter of fiscal year 2007. Service revenues for the third quarter of fiscal year 2008 were $19.8 million, compared to $22.7 million reported for the same period of fiscal year 2007.
Chordiant reported GAAP net income of $0.8 million or fully diluted GAAP earnings per share of $0.02 for the third quarter of fiscal year 2008, compared to $6.5 million and $0.19 for the same period of fiscal year 2007.
Chordiant reported third quarter fiscal year 2008 non-GAAP net income of $2.4 million, or fully diluted non-GAAP earnings per share of $0.08, compared to non-GAAP net income of $7.1 million, or fully-diluted non-GAAP earnings per share of $0.21 for the third quarter of fiscal year 2007. Non-GAAP net income excludes stock-based compensation expense and the amortization of purchased intangible assets.
Deferred revenue at the end of the third quarter of fiscal year 2008 was $51.8 million, a decrease of $16.2 million as compared to the ending balance of $68.0 million at September 30, 2007. Deferred revenue does not include future amounts due relating to the previously announced Vodafone transaction.
Bookings were $26.4 million for the third quarter, up 30% sequentially. Bookings for the first three quarters of fiscal year 2008 totaled $96.6 million.
Backlog of Business
At June 30, 2008, Chordiant's backlog, which includes deferred revenue, decreased to $89.6 million from $93.5 million at the end of the prior quarter. The primary reason for the decrease was the recognition of license revenues during the period. Backlog includes $20.7 million of remaining commitments related to the Vodafone transaction that was closed in the first quarter of fiscal year 2008.
Chordiant's cash, cash equivalents, restricted cash and marketable securities position decreased by approximately $25.9 million during the nine months of fiscal year 2008 to $64.6 million at June 30, 2008, as compared to $90.5 million at September 30, 2007. The decrease in the cash balance includes the $18.6 million used in the second and third fiscal quarter for the share repurchase program which concluded on April 30, 2008.
During the third quarter of fiscal year 2008, cash flows from operations generated $4.6 million of cash.
Non-GAAP Financial Measurements
This press release and the accompanying tables include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP, please see the section of the accompanying tables titled "Non-GAAP Financial Measures" as well as the related Tables C and D which follow it.
Fiscal Year 2008 Financial Guidance
"We remain committed to running a profitable business and believe the recent reduction and reallocation of our workforce enables us to do this even in today's challenging environment," said Steven R. Springsteel. "We continue to take a conservative stance to our outlook, specifically as it relates to North American and United Kingdom financial services markets but believe that the investments we have been making in alliances and in geographic and vertical diversification will positively impact our results over the next several quarters."
Management is updating fiscal year 2008 guidance as follows:
- Total bookings for fiscal year 2008 are expected to range between $124 million and $128 million;
- Total revenues for fiscal year 2008 are expected to range from $114 million to $117 million;
- GAAP primary and fully diluted EPS is expected to range between $0.00 and $0.07 and non-GAAP fully diluted EPS is expected to range between $0.18 and $0.25. These earnings estimates for fiscal year 2008 are based on approximately 31.9 million diluted shares outstanding;
- We expect the ending deferred revenue balances for fiscal year 2008 to increase slightly from the June 30, 2008 balance; and
- Finally, Chordiant expects to end the year with approximately $63 million in aggregate cash, cash equivalents, marketable securities and restricted cash.
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